Tzarina of Compliance Posted October 19, 2022 Report Share Posted October 19, 2022 So this is a weird one. A prime contractor is performing under CPFF completion contract (non DOD). FAR 52.244-2 requires consent to subcontract (the prime does not have approved CPSR). The prime issued what they call a "BOA" for services in the amount of $2,000,000 (non commercial). It is basically an umbrella agreement which specifies how future orders will be priced but does not guarantee a minimum. Only one BOA, and only one BOA holder. The prime anticipates issuing orders of less than $250,000 each on fixed price basis once the work order is priced by the BOA holder under the stated methodology (includes pre-priced labor rates which would be used together with Other Costs to price FFP orders). FAR 52.244-2 requires consent to subcontract for fixed price subcontracts over SAT or LH/Cost type/T&M subcontracts of any value. The Prime does not seek consent since it says the BOA is not a contract and therefore does not meet the definition of subcontract for consent requirements. Since each order under this "BOA" is less than SAT, each order is below the consent requirement. Does this sound right? Consent would not be required? Link to comment Share on other sites More sharing options...
Don Mansfield Posted October 19, 2022 Report Share Posted October 19, 2022 The applicable definition of "subcontract" is at FAR 44.101: Quote Subcontract means any contract as defined in subpart 2.1 entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract. It includes but is not limited to purchase orders, and changes and modifications to purchase orders. Contract is defined at FAR 2.101: Quote Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements covered by 31 U.S.C.6301, et seq. For discussion of various types of contracts, see part 16. So, if the prime truly has a BOA as described in the FAR, what they are saying sounds right. Link to comment Share on other sites More sharing options...
Tzarina of Compliance Posted October 19, 2022 Author Report Share Posted October 19, 2022 10 minutes ago, Don Mansfield said: The applicable definition of "subcontract" is at FAR 44.101: Contract is defined at FAR 2.101: So, if the prime truly has a BOA as described in the FAR, what they are saying sounds right. Thank you, I was considering this too. I think what I am more interested in is the purpose. What is the purpose of consent? Why would they need one if they issued, say, something like an IDIQ with fixed price orders and guaranteed minimum, but not a BOA, which is not really like the one described in the FAR. FAR BOAs are basically admin agreements and orders are still competed under FAR 6 etc. This sub arrangement seems more like a single holder IQC of sorts except it has no guaranteed min. I am just trying to understand why would I be concerned about consent in one case but not the other. Maybe I am overthinking this. Link to comment Share on other sites More sharing options...
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